Beautiful luxury villa as an example of real estate investment

Property remains an important part of the investment landscape. Stability, growth potential and the ability to generate regular cash flow are its strengths. Yet navigating this market can be daunting, especially with so many options available: direct property, SCPIs, the Estate Invest service offered by de Ravel Finance. In this article, learn more about each method so you can make informed decisions.

Direct property

Direct property investment offers investors the opportunity to acquire a variety of physical assets. These may include individual properties (flats, houses), or commercial property (offices, warehouses).

The benefits

  • Total control By investing directly in property, investors have total control over the management of their investments. From selecting tenants to setting rents, they have the power to make these decisions.
  • Regular income Investing directly in property can generate regular income in the form of rents, providing investors with a stable passive income.
  • Potential for capital appreciation Over time, property values tend to rise, which can lead to capital gains for investors when properties are sold.

Disadvantages

  • Active management Investing in property directly requires active management. You have to devote time to tasks such as finding tenants, maintaining the property and managing repairs. So any damage to the property (due to tenants, weather events, etc.) and the associated costs have to be managed by the investor himself.
  • Agency fees And if investors don't want to get involved in this active management process, they have to delegate it to professionals, and pay agency fees that are usually quite high.
  • High taxation Rental income is generally taxable and added to gross annual income, increasing the overall tax rate. In addition, landlords are subject to property taxes based on the value of their property, and the sale of a property can lead to capital gains taxes, reducing net returns.
  • Limited liquidity Liquidity: compared with other investments, property is less liquid. Reselling a property can take a long time and involve additional costs. And if it has to be done in a hurry, that complicates matters.
  • High initial capital : Direct investment in real estate traditionally requires substantial initial capital to purchase properties, pay transaction costs, carry out renovations, etc. This often requires credit, and therefore a financial commitment over several years. This often requires a loan, which means a financial commitment over several years.

The SCPI

Another way of investing in property is through a SCPI (Société Civile de Placement Immobilier)a company that manages a diversified portfolio of real estate assets and allows investors to hold units in this portfolio.

The benefits

  • Diversification SCPIs allow investors to diversify their property portfolio by investing in a range of commercial or residential properties, often located in different geographical areas.
  • An accessible property investment option Investing through an SCPI gives individual investors access to the property market at a relatively low cost compared with buying property directly.
  • Delegated management SCPI: by investing in an SCPI, investors delegate property management to a professional management company. Whether it's rental management or building work, investors don't have to worry about a thing.
  • Regular income SCPIs: SCPIs generally distribute regular income in the form of dividends from the rents received on the properties owned by the company.

Disadvantages

  • No direct control : By investing in an SCPI, investors do not own the property directly. They therefore relinquish some direct control over their investments, with decisions being taken by the management company.
  • Dependence on management : the performance of the investment depends largely on the skills and management of the SCPI's management company. Inadequate management decisions can affect the income and value of your investment.
  • Fees and commissions : SCPIs may involve initial subscription fees, annual management fees and other charges, which may reduce the overall return on the investment.
  • Liquidity risk : although SCPI units are generally more liquid than physical property, selling units can take time and depends on demand on the secondary market. Reselling units in a hurry is therefore complicated with SCPIs.

The Estate Invest service

Do you want to invest in property, but don't know what to choose between direct property ownership and SCPIs, or aren't convinced? Have you heard about our Estate Invest ?

The service Estate Invest proposed by de Ravel Finance offers innovative approach to invest in property thanks to targeted investments in REIT shares (Real Estate Investment Trusts). These are companies that own, manage or finance property assets and distribute a large proportion of their income in the form of dividends to shareholders. These shares offer investors the opportunity to benefit from both the value of property assets and stable monthly returns from dividends.

There are many advantages to using our Estate Invest service. Firstly, investors become direct owners of shares in property companiesThis gives them direct control over their investments at all times. 
What's more, the dividends from property profits are paid on a monthly basis, providing regular and attractive cash flow
And unlike investing in an SCPI, this service ensures a high level of security. optimum liquidity when shares are resoldmaking transactions easier, particularly in emergencies.
Finally, Estate Invest is a service available from just €500This makes it accessible to a wide range of investors. This accessibility democratises property investment and allows everyone to benefit from the advantages of this lucrative market. 

Investing in property is both rewarding and complex, offering a variety of options for increasing wealth and generating passive income. Whether it's direct property, SCPIs or our Estate Invest service, each method has its own advantages and disadvantages, tailored to the needs and preferences of individual investors.

And if you would like more information about the service Estate Invest If you would like to know more about de Ravel Finance, please do not hesitate to contact our team, who will answer your questions as quickly as possible.